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March 7, 2013

5 Reasons Advisors Are Wasting Their Time on Social Media

Across the country, financial advisors are wasting their time on social media, but not for the reasons you may think. Before I explain why this is happening, let’s set the record straight that a good number are seeing success with social media efforts.

A recent study by FTI Consulting & LinkedIn stated: “In the past year, more than three in five financial advisors who used LinkedIn for client prospecting successfully gained new clients as a result — with nearly a third of these generating $1 million or more in assets under management.”

The same study stated that more than half of financial advisors expect social media to play a significant role in their marketing efforts in 2013.

All evidence of success aside, here are five reasons financial advisors may be wasting their time on social media and what they can do to make their efforts more fruitful.

Reason No. 1: Inappropriate broadcasting.

The problem: Simply pushing your content without interacting with your audience will get you nowhere. If you’re broadcasting because you don’t have time to spend engaging your clients and prospects, then I recommend that you not use social media at all. My guess is you’ll probably achieve similar results.

The solution:Engagementis the name of the game for social media. Today’s consumers and investors want relationships with both individuals and businesses online. Use the 80/20 rule. Eighty percent of your content (status updates, tweets, RTs, etc…) should be articles/content relevant to your audience from different sources or comments and conversations. The remaining 20 percent may be information about your business and what you do.

Reason No. 2: A nonexistent online marketing strategy.

The problem: Many are flying blind when it comes to social media, with no formal plan or purpose. They may be trying to be all things to everyone and hoping for good results.

The solution: Knowing exactly what you are trying to accomplish will be the first step toward success. If you don’t know why you are using social media, neither will your clients and prospects. Set goals and objectives, determine available resources (time, money, etc.) you can allocate to this ongoing project, establish which metrics you will track to define your success … and then build your marketing and engagement strategy. If you’re not sure how to proceed, consider hiring a consultant. Be cautious: Not everyone who touts themselves as a social media expert can justify the claim. Do your research. Ask about previous experience in the financial services arena — they should show examples of their work and the data/reports to support the claims. A consultant who is unfamiliar with insurance and securities regulations around marketing and advertising may only lead to future challenges.

Reason No. 3: Neglecting to create a content calendar.

The Problem: Without a calendar, you may quickly become weary trying to deliver a consistent flow of content. Over time, people tend to become inconsistent and begin to neglect certain platforms.

The Solution: Create a content calendar. Consistency is a key to social media success. However, consistency in what you post is not enough. Building a strategy and knowing your audience (needs, wants, challenges, etc.) will help you consistently create content that is relevant to your prospective audience. Consider designating certain days each week or month to post content around a specific theme (e.g. budgeting tips every Monday). This will help you stay on track and maintain focus for the long haul.

Reason No. 4: Choosing the wrong platform(s).

The Problem: Oftentimes, advisors try to tackle too many platforms because they think they must be visible everywhere. For some, that may be the case, but there is no cookie-cutter approach to social media.

The Solution: Do your research and determine which platforms provide the greatest exposure to your target audience. Start your social media efforts there. You can grow your online presence over time, so don’t try to tackle too much all at once.

Reason No. 5: Selling instead of educating.

The Problem: No one wants to be sold. A heavy dose of sales materials about what you offer may turn off prospective clients. Selling products and services in an industry where those same products and services are available through many channels makes you a commodity.

The Solution: If you’re going to sell anything, sell them your personality, experience, and your knowledge. In other words, provide education on how you as an individual are different (morals, beliefs, values, etc.). People do business with people they like and trust. Differentiation comes from educating your prospects on the concept of working with you. They can buy what you offer somewhere else, but there is only one YOU.

Focus on these core areas and you will maximize your potential for social media success. Be patient and the business will come with every new relationship that you build. With that said, what’s your strategy or best practice for social media?